The Financial Services Authority (FSA) required the paid-up capital of digital bank at least Rp10 trillion (US$714.28 million) - Photo: Special

JAKARTA (TheInsiderStories) – The Financial Services Authority (FSA) required the paid-up capital of digital bank at least Rp10 trillion (US$714.28 million), said the chief executive yesterday. Its expecting the Indonesian Banking Development Roadmap in 2020 – 2025 will be released in mid of this year.

According to the chief executive, Heru Kristiyana, said virtually, there are two digital bank categories in the roadmap. The categories separate as full digital bank and the transformation of an existing bank into a digital bank.

Other requirements must fulfill by the banks are a realistic, implementable business model, using safe technology, a prudent management, sustainable digital business, and understanding risk mitigation to anticipate digital risks such as cybercrime, he adds. Then, the protection of customer data, have a directors who are competent in the IT field, also contributing to financial inclusion and others.

The concept of digital banking in Indonesia has been prepared since five years ago. One of the initiators is PT Bank BTPN Tbk (IDX: BTPN). On 11 August 2016, the medium lender launched a digital banking innovation application called Jenius. A year after the Jenius launched, DBS Indonesia formed a Digibank, followed by PT Bank Bukopin Tbk (IDX: BBKP), PT Bank Permata Tbk (IDX: BNLI), and PT Bank Danamon Tbk (IDX: BDMN).

One of the largest bank, PT Bank Central Asia Tbk (IDX: BBCA) will also plans to convert PT Bank Royal becomes BCA Digital Bank in this year after acquired the lender for Rp988 billion at the end of 2019. A similar stepped taken by the senior banker, Jerry Ng, together with Patrick Walujo, founder of Northstar Capital.

After acquired 37.65 percent of PT Bank Artos Indonesia Tbk (IDX: ARTO), they have planned to convert the entity as a digital bank with brand “Bank Jago”. The state lender, PT Bank Rakyat Indonesia Tbk (IDX: BBRI) also considered to convert one of its subsidiaries, PT Bank BRI Agroniaga Tbk (IDX: AGRO) to become a digital bank.

The latest one, Singapore’ Sea Limited, has proposed to FSA to make PT Bank Kesejahteraan Ekonomi as a digital bank to support its e-commerce firm, Shopee, businesses in Indonesia and Taiwan. Indonesian banks is gearing up to face the challenge in digitalization and modernization of banking service to meet the needs of millennial generation.

The digitalization was expected can slash the operational cost for banks and engage customers widely across nation through its technology. Indonesia’ population more than 270 million and millennials are projected around 58 percent of the total society by 2027. The utilization of the digital revolution in the economic activities is estimating could boost the economy to grow by 7 percent in annual basis.

US$1: Rp14,000

Written by Editorial Staff, Email: theinsiderstories@gmail.com